Christian Candy adviser linked to Litvinenko and his alleged killer

Christian Candy pictured outside the high court earlier on in the trial.Photograph: Carl Court/Getty Images

Property tycoon Christian Candy’s key adviser was a director of a detective agency which made payments to the Russian dissident Alexander Litvinenko and to the former KGB officer accused of murdering him.

Details of the transfers to alleged killer Andrey Lugovoy and to Litvinenko, who died in 2006 after swallowing a radioactive substance called Polonium-210, were given during a high court trial.

Candy and his brother are defending charges that they used blackmail and intimidation to extort repayment of a loan. The case against the billionaire property developers is being brought by their former business associate, Mark Holyoake.

Steven Smith, a founding director of Christian Candy’s property group, was cross-examined on Thursday about his involvement with the London-based investigations agency RISC Management. He was a director from the firm’s incorporation until 2013.

In a wide-ranging testimony, Smith told of his close relationship with RISC chief executive Keith Hunter. The detective had travelled to France and arranged protection for Smith and his family after a violent robbery.

The court has heard how Smith, who now walks with a stick, jumped out of a first-floor window and broke his spine to escape attackers. Smith explained how he had stood by Hunter after the private detective was arrested on suspicion of police bribery in 2012.

He recalled RISC’s dealings with Litvinenko. Smith had arrived at RISC’s offices for a directors’ meeting two days after the Russian had ingested poison while drinking tea at a London hotel. The boardroom had been secured by police because traces of the substance had been left during Litvinenko’s visit.

“The whole of the upper floor was cordoned off with radioactive yellow and black paper everywhere,” said Smith. “So obviously I asked the question: ‘Why is our boardroom radioactive?’ And they told me that Mr Litvinenko ... had visited the office on the day he was poisoned.”

A British judge found last year that Lugovoy and another agent had poisoned Litvinenko. During the inquiry, it was revealed that RISC had made payments to Lugovoy and Litvinenko. These included a £1,000 starter fee and a £7,500 transfer to a Cyprus bank account belonging to Lugovoy.

Smith said he was unaware of the payments at the time but agreed he knew the men had undertaken work for RISC. Its clients included Boris Berezovsky and other oligarchs who had fallen out with Russia’s president, Vladimir Putin.

“I did ask and they said he was there for a meeting and supplying information,” Smith told the court. “If you remember, Mr Litvinenko was very much an anti-Putin individual and was quite high profile in anti-Putin circles.”

Holyoake, who borrowed £12m from Christian Candy for a property deal, alleges that in 2012 he was threatened during a phone call with Christian’s brother, Nick Candy. Nick is alleged to have said his brother would sell the loan to Russian debt collectors who “would not think twice” about “seriously fucking hurting you”. The Candys deny the charges, as does Smith, who is also a defendant in the case.

Holyoake’s QC Roger Stewart sought to paint a picture of RISC as a firm with a questionable reputation.

RISC and another firm set up by one of its employees were hired for numerous jobs by CPC Group. The firm made checks on all the potential purchasers at One Hyde Park, the Candys’ flagship super-luxury development of about 80 apartments in London’s Knightsbridge district.

Former RISC managing director Cliff Knuckey was asked to serve court papers on one of the purchasers, with whom CPC was in dispute. During this episode, Knuckey was found to have impersonated a representative of the Saudi royal family, an estate agent and a member of Vodafone customer services, Stewart told the court.

Christian Candy has also told the court he asked Knuckey for advice on who could help recover Holyoake’s debt.

Addressing Smith, the QC claimed: “The fact that you were prepared to use Mr Knuckey despite knowledge of his methods shows that you were not concerned whether he operated legally or illegally”. Smith replied: “Absolutely not.”

Knuckey and his former colleague at RISC, Keith Hunter, were arrested in May 2012 on suspicion of police bribery. RISC offices were searched by police. All charges were later dropped.

Smith said he had decided to remain on the board of RISC following Hunter’s arrest. This was in part because Hunter, an old friend who shared his passion for horse racing, had flown to be by his side following the robbery at his home near Nice.

“I took the decision that I would stand by Keith,” Smith said. His voice cracking with emotion, he continued: “One very good reason was that when I needed some help a year previous, the day I was attacked, by the time I came out of my operation which lasted some 13 hours, Mr Hunter had got on a plane and flown to Nice and had already started working with the French police to secure the crime zone, to help them secure forensic evidence.

“He then set up security for the house, for my wife, and indeed security for me in the hospital. At the time we had no comprehension for why this had happened and indeed the severity of the attack. It looked like attempted murder.”

In his evidence, Christian Candy told the court that Smith flung himself out of the first-floor window of his holiday home and into a ravine to escape robbers. The attackers, Candy said, had since been jailed.

By July 2012, after Hunter and Knuckeys’ arrests, Holyoake was being chased for repayment. Stewart claimed that Smith was aware CPC was planning to use “illegitimate debt collectors” to retrieve the money.

“You were aware that what was in fact being contemplated was individuals introduced by Mr Knuckey and you were also aware that Mr Knuckey had behaved improperly ... In those circumstances the involvement of Mr Knuckey strongly suggests that no legitimate purpose was being contemplated at this time.”

Candy says that his firm eventually decided not to appoint collectors for Holyoake’s debt. The case continues.